Advertising Area

Advertising Area

Business Recap: Government launches tender offers for 2210 PPP schools around Egypt

CAIRO: The Ministers of Education, Finance and Investment issued a joint announcement Wednesday for the construction and maintenance of 2210 schools to be built throughout the country, in an attempt to reactivate the dormant public-private partnership (PPP) system in executing basic infrastructure projects. The value of the government s school initiative is estimated at LE …

CAIRO: The Ministers of Education, Finance and Investment issued a joint announcement Wednesday for the construction and maintenance of 2210 schools to be built throughout the country, in an attempt to reactivate the dormant public-private partnership (PPP) system in executing basic infrastructure projects.

The value of the government s school initiative is estimated at LE 200 million, according to Minister of Finance Youssef Boutros Ghali. The government decided to move forward with the program after a successful trial run last October with the offering of 50 schools to be built by the private sector in 11 governorates.

Similar to the October offering, participating companies receive a government contract ranging from 15 to 20 years where the government will be responsible for paying construction and annual maintenance fees. The government also retains the operational responsibilities. Upon contract expiration, the government maintains asset ownership unless both sides agree on renewal terms.

Addressing public concern over the possible effects of allowing more private sector participation in the implementation of public service project, Minister of Investment Mahmoud Moheiddin said PPP projects save the government money and allow for the simultaneous execution of numerous projects in different areas.

Since 1991, the private sector has participated in developing 16 infrastructure projects in four traditionally public domains including telecommunication, transportation, irrigation and sewage with $6.2 billion (LE 35.7 billion) in total investment, according to MF figures. The numbers pale in comparison to other developing countries over the same period of time. Malaysia, for example recorded 81 projects worth almost $38 billion and the Philippines came in with 78 projects worth almost $32 billion, according to MF.

Ghali says the government aims to implement the PPP concept in all areas of infrastructure development and is now drafting a law to govern the relationship between the government and the private sector in project execution.

In January, the government announced it will make available more than LE 7 billion in fresh and sewage water sanitation projects for private sector participation in 2007, with individual projects requiring investments from just under LE 1 billion up to LE 3 billion.

2006 GDP up to LE 617 billion

Minister of Finance Youssef Boutros Ghali said last week final economic figures for 2006 show a 6.8 percent increase in the country s gross domestic product to LE 618 billion, up from the preliminary government estimate of LE 593 billion.

Ghali s comments came in light of fresh public criticism that only the country s limited upper class was feeling the relatively infant economic upswing. A Council of Ministers study released last week showed nearly 70 percent of the public felt the economy is not improving and nearly 50 percent said democracy is absent from the political process and government corruption is widespread.

Minister of Economic Development Othman Mohamed Othman said he is aware of the public s distrust of the government and the figures it reports on economic progress, but defended the competence of the government s reporting authorities.

Responding to reformists suggestions that government figures undergo independent audits to confirm accuracy, Othman said the government cannot allow its work to be audited because it already implements internationally-endorsed practices.

Egyptian Tourism Company sells more Sahl Hashish land

The Egyptian Tourism Company (ETC) said last week it has reached a deal to sell 96,800 square meters of its possessions in Sahl Hashish, near Hurghada, to Pyramisa Hotels Group for $7.7 million (LE 44 million), or $80 (LE 450) per sq. m. Pyramisa, a major developer in the tourism sector, is yet to announce its plans for the acquired land.

A company official said ETC is studying how to best utilize its land assets in Sahl Hashish to finance its ongoing expansion.

ETC s land bank in Sahl Hashish is estimated at 32 million square meters. The company has already sold 2.5 million square meters to Jordan s Shaheen Group to establish its $2 billion Serrenia resort. In a statement to the Cairo and Alexandria Stock Exchange, ETC said it sold 1.5 million square meters to Shaheen for $32.2 million (LE 184 million), or $21 (LE 123) per square meters.